Cryptocurrency is on a tear.
Crypto investors – myself included – couldn’t be happier.
My alternate currency investment returns have given me profits of more than 500% in just the past five weeks alone.
These big profits are one reason why I invested.
But they’re not the only reason.
I also wanted to put my money in a place where a couple of currently trending – and dangerous – risk factors couldn’t hurt it.
Mentioning cryptocurrency and safety in the same sentence might seem like an assault on logic.
But not when it comes to the growing threat of the dollar and global debt.
Both have the potential to seriously damage traditional portfolios.
Let me tell you how that could happen… and what you can do about it.
Too Much Debt
Some debt isn’t bad. It helps fertilize growth.
But too much debt?
It can sink individuals, companies and countries alike. Markets can melt. Currencies can crash. The entire global financial system can unravel.
All these things happened in the housing and banking upheaval of 2007-2008… except the last.
We came within a whisker of a global financial meltdown. Talk about risk!
It happened once.
It could happen again. And sooner than you think.
After some badly needed debt deleveraging, we’ve reversed direction. Zero Hedge reports that global debt reached a record $217 trillion in late 2016. That’s roughly 325% of global GDP.
It’s not a pretty picture…
In the advanced economies, unbridled government spending is back in vogue. In the U.S. and U.K., government debt has more than doubled since 2006, according to the Institute of International Finance.
In Japan and the eurozone, it’s gone up 50%.
In the emerging markets, rising debt has been stoked by expanding currency bond markets.
Rising global debt worries the hell out of me.
Then I see what the dollar is doing…
And I realize these are risks I can no longer ignore.
The dollar has fallen about 10% since January…
Why? Many reasons…
Trump’s pro-business agenda is at risk of never getting off the ground. Geopolitical uncertainty is ratcheting up from North Korea to Russia. And U.S. economic growth prospects are losing their luster: The International Monetary Fund recently cut forecasts.
Interest rates are going up. That usually boosts the local currency. But, in the dollar’s case, they aren’t rising fast enough.
Rates have been raised four times since December 2015, and I expect another raise before the year is out.
The rub? Historically speaking, rates are still low.
Don’t get me wrong. This is not a flee-for-the-hills scenario. At least, not yet.
The dollar could rebound tomorrow for all I know.
But, at the moment, the dollar is scuffling. And rising global debt can’t be helping.
It’s not a good time to be passive. You need to diversify away from the dollar.
And not just the dollar. Rising global debt is a problem for all the world’s currencies.
The good news? Cryptocurrencies offer a compelling landing spot.
The Dollar and Crypto: Two Ships Passing in the Night
Take a look at how bitcoin has been doing against the dollar this past year…
By the way, my co-founder Adam Sharp just wrote a great piece on ethereum last week. He spells out why he loves ethereum’s long-term prospects.
Some investors like cryptocurrencies for the upside they offer, others for the diversification they provide.
Me? I like them for both reasons.
I don’t think the dollar is in immediate danger. But risks are increasing. A real loss of confidence in the U.S. economy and dollar is more likely today than it was this time last year. Or even six months ago.
I found a great way to get protection while making a ton more money in the long haul than what most investments offer in best-case scenarios.
Cryptocurrency markets have been on fire. The long haul shrunk from years to not months, but WEEKS.
Sheer inclines like what we’ve seen recently never last. That’s okay. We’re at the beginning of cryptocurrency’s coming-out party.
So if you haven’t invested yet, don’t worry. Time is on your side. Adam has just written a must-read report recommending four cryptocurrencies with exceptional upside to members of First Stage Investor.
To find out what they are, just click here.
Invest early and well,
Founder, Early Investing